In July of 2009, the minimum wage in the United States became $7.25 per hour. While this was seen as an improvement by some, this is far from a living wage for families. These days, many people are feeling the pinch of a slow economy. For some, a minimum-wage job may be all that is available. If you are making minimum wage, it takes some planning to meet financial obligations. However, creating a budget can help stretch the salary and any supplemental resources.
Budgeting should be a priority. A budget is simply a spending plan that helps you track how much money you make each month, and how much you spend. Creating a budget will help you think first before you decide to spend money. Creating a budget usually requires three steps:
- Determine where your money is being spent
- Evaluate your current spending and set guidelines and priorities.
- Track your spending to ensure it stays within your goals
Reviewing your Spending
The first step is to evaluate the items your income is being spent on. Start by reviewing financial records for the past 12 months, including pay stubs, bill payments, bank statements and itemized credit-card statements. Then go through them and compile totals for your income and expenses in a set of categories that makes sense for you.
Setting Spending Guidelines
Once you have reviewed your spending, the next step is to establish spending goals. Determine which categories of spending are necessities and what can and should be cut. Housing and food are items that will always be at the top of the necessities list. Beware of luxuries dressed up as necessities, such as cable and cell phones. Your goal should be to reduce your spending to about 90% of your income. This leaves a cushion for unexpected expenses and emergencies.
Once you have set your budget goals, you need to develop the habit of tracking your expenses on an ongoing basis. If you make minimum wage, you may find it difficult to stay within your budget. Take an honest look at your budget to determine where you might cut back on non-essential expenses.
Expense Cutting Suggestions
Be careful when using credit cards to avoid running up debt and incurring large amounts of interest. If you must use cable to access television stations, opt for basic cable rather than premium packages. Food expenses can be reduced by purchasing food items when they are on sale. Eating at home more often and packing lunches for work or school can also save money. The key to staying within a budget is to prioritize and put "needs" above "wants".
Those who work jobs where they earn the minimum wage may need additional assistance to make ends meet. Supporting a family on minimum wage can be hard. However, there are community resources to supplement your income. For example, you may qualify for the Supplemental Nutrition Assistance Program which provides funds to help you purchase food. You can apply for this assistance at your local Department of Social Services or Humans Services agency. You may also qualify for some rent assistance through your local public housing agency.